AAC Holdings, Inc.
- Company Name
- AAC Holdings, Inc.
- Stock Symbol
- Class Period
- March 8, 2017 to April 15, 2019
- Motion Deadline
- July 15, 2019
- Middle District of Tennessee
The complaint charges AAC and certain of its officers with violations of the Securities Exchange Act of 1934. AAC provides inpatient and outpatient substance abuse treatment services for individuals with drug addiction, alcohol addiction, and co-occurring mental/behavioral health issues in the United States.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding the Company’s business and financial statements. Specifically, defendants failed to disclose that AAC’s internal controls over financial reporting and disclosure controls and procedures were inadequate to accurately reflect adjustments related to estimates for accounts receivable, provision for doubtful accounts, and revenue. As a consequence, AAC had misstated its financial and operating results in its annual reports for fiscal years 2016 and 2017 and all quarterly reports throughout 2017 and 2018, which would require AAC to restate the financial and operating results reflected therein. As a result of this information being withheld from the market, AAC securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $12 per share.
Then on April 16, 2019, defendants issued a press release announcing AAC’s financial results for the fourth quarter and fiscal year ended December 31, 2018 and providing guidance for 2019. The release disclosed that the Company’s annual reports for fiscal years 2017 and 2016, as well as all quarterly reports throughout 2017 and 2018, could no longer be relied upon, and stated that the financial statements contained therein would be restated to reflect adjustments related to estimates for accounts receivable, provision for doubtful accounts, and revenue. On this news, AAC’s stock price fell $0.40 per share, or nearly 19%, to close at $1.74 per share on April 16, 2019.